AeroVironment(AVAV) - 2026 Q2 - Quarterly Report

Revenue and Growth - Revenue for the three months ended November 1, 2025, was $472.5 million, an increase of $284.0 million, or 151%, compared to $188.5 million for the same period in 2024[131]. - Total revenue for the six months ended November 1, 2025 was $927.2 million, a 145% increase from $377.9 million in the same period last year, driven by product and service revenue increases from the BlueHalo acquisition[151]. - AxS revenue for the three months ended November 1, 2025 was $301.6 million, a 60% increase from $188.5 million in the same period last year, driven by product revenue from the BlueHalo acquisition[144]. - AxS revenue for the six months ended November 1, 2025, was $586.9 million, a 55% increase from $377.9 million for the same period in 2024, driven by a $109.8 million contribution from the BlueHalo acquisition[163]. - SCDE revenue for the three months ended November 1, 2025 was $170.9 million, compared to $0 for the same period in 2024, resulting from the BlueHalo acquisition[146]. - SCDE revenue for the six months ended November 1, 2025, was $340.3 million, attributed to business units obtained from the BlueHalo acquisition[165]. Costs and Expenses - Cost of sales for the three months ended November 1, 2025, was $368.4 million, representing an increase of $253.6 million, or 221%, compared to $114.8 million for the same period in 2024[132]. - Cost of sales for the six months ended November 1, 2025 was $728.0 million, a 227% increase from $222.8 million in the prior year, primarily due to costs associated with the BlueHalo acquisition[152]. - Selling, general and administrative expenses increased to $98.3 million for the three months ended November 1, 2025, compared to $37.9 million for the same period in 2024[131]. - SG&A expense for the six months ended November 1, 2025 was $229.6 million, or 25% of revenue, compared to $71.7 million, or 19% of revenue in the prior year, largely due to BlueHalo acquisition-related expenses[156]. - Research and development expenses increased to $36.0 million for the three months ended November 1, 2025, compared to $28.7 million for the same period in 2024[131]. - R&D expense for the three months ended November 1, 2025 was $36.0 million, or 8% of revenue, up from $28.7 million, or 15% of revenue in the prior year, mainly related to the BlueHalo acquisition[137]. Profitability and Loss - Gross margin decreased from 39% to 22% due to increased amortization and other non-cash purchase accounting expenses following the BlueHalo acquisition[134]. - Net loss for the three months ended November 1, 2025, was $17.1 million, compared to net income of $7.5 million for the same period in 2024[131]. - The effective income tax rate for the six months ended November 1, 2025 was (16.7)%, compared to 4.4% for the same period in 2024, influenced by federal R&D tax credits and FDII deductions[160]. - Equity method investment income, net of tax for the six months ended November 1, 2025 was $3.0 million, up from $1.1 million in the same period last year[161]. Acquisition Impact - The acquisition of BlueHalo contributed $134.4 million to product revenue and $110.7 million to service revenue in the three months ended November 1, 2025[131]. - The proportion of service revenue to product revenue is expected to remain higher following the acquisition of BlueHalo[131]. - AxS segment adjusted EBITDA for the three months ended November 1, 2025 was $51.4 million, a 99% increase from $25.9 million in the prior year, primarily due to increased revenue[145]. - AxS segment adjusted EBITDA increased by 65% to $103.8 million for the six months ended November 1, 2025, compared to $63.1 million for the same period in 2024, primarily due to the revenue increase[164]. Backlog and Cash Flow - Funded backlog as of November 1, 2025, was approximately $1,092.5 million, up from $726.6 million as of April 30, 2025[167]. - Unfunded backlog as of November 1, 2025, was $2,790.0 million, which does not obligate customers to purchase goods or services[168]. - Net cash used in operating activities for the six months ended November 1, 2025, was $(168.8) million, a decrease of $193.5 million compared to $24.7 million provided in the same period in 2024[179]. - Net cash used in investing activities increased to $(1,157.7) million for the six months ended November 1, 2025, primarily due to the cash consideration for the BlueHalo acquisition[180]. - Net cash provided by financing activities was $1,645.3 million for the six months ended November 1, 2025, an increase of $1,662.8 million compared to $(17.5) million used in the same period in 2024[181]. - The company anticipates that existing cash, cash equivalents, and cash flows from operations will be sufficient to meet its working capital and capital expenditure requirements for the next twelve months[173]. Stock Issuance - The company issued 4,057,460 shares of common stock at a public offering price of $248.00 per share, raising approximately $1.70 billion in net proceeds[171].